It is no longer news that the fear of the unknown is occasioned by the dwindling fortune of oil in the International market, Nigeria’s major economic backbone which is now below $40 per barrel in the world market.
But what is yet to be seen is how the Federal Government of Nigeria and the 36 states will weather/wade the storm in the new financial year. But the State is already implementing several measures to overcome the fiscal constraint created by the Covid-19 and #endSARS crisis in recent time.
Now, the Federal Government has opted for another debt stock as the nation plans to fund the 2021 budget deficit with N4.28trillion new borrowings, and the new borrowing figures represent about a third of the proposed 2021 budget.
For some states, which has been plunged into unprecedented debt by previous administrations, which may not be an option for some States to go for loan to finance those activities of its government.
In Ogun State, at least, the signs of what to come have begun to manifest. The ray of hope appeared on the horizon on Wednesday, 2nd December, 2020 when the State Governor, Prince Dapo Abiodun, presented the 2021 Budget to the State House of Assembly. To say the least, it is obvious that the Ogun State Government did not deceive itself over what the financial environment would look like in 2021.
For a State to embark upon its completion of major massive roads construction abandoned by the previous administration, as well as strengthening of monitoring and evaluation of the projects.
Thus, Governor Dapo Abiodun, working closely with appropriate committees of the House of Assembly in preparing the budget, showed that he did not set out to deceive the people of the state.
The budget, christened ‘’Budget of Recovery and Sustainability’’, has a total estimate of N339Billion which was N58Billion above of 2020 budget, after it was reviewed from the initial N450Billion approved by the State House of Assembly in the wake of Covid-19 pandemic, all the assumptions underlying the 2020 Budget unrealistic and unattainable.
While some states might have considered the usual bogus budget estimate that characterized the past years when petrodollar flowed like rain water in the wake of the Covid-19 pandemic.
Governor Abiodun chose not to play to the gallery; Ogun State is one of those States in the country where the culture of paying tax is taboo and almost alien to the people.
The government has looked inwards and thinks out of the box to satisfy its people. The contents of the 2021 Appropriation Bill clearly show that this is exactly what the Abiodun-led administration has done.
Among the objectives of the budget were; leveraging technology and automation, as well as more effective monitoring of Internally Generated Revenue (IGR), it is also aimed at addressing revenue leakages and redirecting scarce resources to the poor and vulnerable, it will also targeted at capacity development, inclusiveness of all Ministries, Departments and Agencies IGR growth drive, diversification of the economy from Federation Account Allocation-dependent to exploitation of our natural endowments and widening of tax base for the socio-economic development of the state and exploitation of raw materials (solid minerals).
The Governor also assured the employees of government of no pay cut or retrenchment of workforces; prompt payment of workers’ salaries, pensions and gratuities of retired senior citizens; aggressive IGR drive; radical approach to reducing the level of poverty among the citizenry through provision of conducive environment for job creation and wooing of investors from foreign country to the State by conveying investors forum; completion of abandoned projects, effective supervision and monitoring of all government capital projects in the State to enable government get value to taxpayers’ money and on funds expended on projects, development of agriculture, so as to ensure provision of enabling environment for food security and growth of agro-based industries with immense private sector participation, among others.
The Ogun State Government knows that it is imperative for growth and development in the State, in which the Budget is designed to further deliver on the goals of his administration’s “Building Our Future Together”. Abiodun emphasized that over the period of years 2021 – 2023, the State government’s fiscal policy will be geared towards improving the efficiency and effectiveness of spending and achieving a better balance between capital and recurrent expenditure. Indeed, this will include greater control of the wage bill; directing capital expenditure on critical infrastructure and boosting revenue receipts by identifying and plugging revenue leakages.
With these lofty ideas and objectives, Abiodun explained in his budget speech that ‘’considering the limited resources at our disposal and in order to keep the economy growing and restore the tempo of sustainable development, we have proposed a budget size of N339Billion for the 2021 financial year. This is representing an increase of 5.8 percent compared with the 2020 budget after it was reviewed”. Indeed, the proposed N339Billion expenditure comprises the recurrent of N162Billion and capital of N177Billion, which the State government have been to achieve a 52 percent capital expenditure as dictated by best practices to drive the developmental objectives, and the substantial part of the 2021 recurrent cost estimate is allocated to paying salaries and overheads in MDAs providing these critical public services.
Abiodun lamented that personnel cost remains the largest single item of expenditure, he said and cited that by 31st October 2020, the State has accounted for 35.5 percent of total State government spending and is projected at 21 percent of 2021 total expenditure. He said necessary steps will be taken to sustain the payroll integrity and ensure that the nominal roll of the Public Service and payment of monthly pensions is accurate (e.g. removal of duplication of BVNs from the State payroll). He maintained that the government shall continue to be prudent and responsible in respect of MDAs overhead expenses considering attendant economic realities.
The Governor further disclosed that N177Billion was earmarked for Capital Expenditure, while N162Billion would be expected on Recurrent Expenditure. He added that Personnel Cost made up of Salaries and Allowance of N50 Billion, and provision of N28.4Billion was made for debt servicing in 2021 appropriation bill, total of N12Billion is provided for transfers to the Stabilization fund to insulate and position the State towards unprecedented activities or economic shocks towards growth recovery, while aggregate sum of N155Billion is expected to be available for physical capital projects in 2021.
Major key allocation in the 2021 budget especially in line with ISEYA mantra of this administration of Prince Dapo Abiodun, includes; Infrastructure gulped N61Billion, Social Welfare and Wellbeing gulped N93Billion, Education which will gulp N58Billion, Youth Empowerment guzzled N6Billion, Agriculture N15Billion, Enablers N106Billion, among others were; Economic affairs N75Billion, General Public Services N49Billion, Health N35Billion, Housing & Community Amenities N28Billion, Social & Environmental Protection N5billion, Public Order and Safety N9Billion, Recreation, Culture and Religion N7Billion, while Statewide Services will gulped N73Billion, it is to be noted that enablers include; statewide services, general public service, public debt charges, stabilization fund, judiciary, legislature, pension and gratuities.
It is our prayer that the desire of the current administration in the state not to give the people false sense of financial security will translate to expected results and that the people key into the current economic realities for government to serve them better, and it is our collective responsibility to wish the Governor, House of Assembly Members, Cabinets Members, Civil Servants, Public Servants and the entire citizens of the state for the well-deserved ‘’Budget of Recovery and Sustainability’’ and best of this wonderful glorious years ahead.
Òrúnbon, an opinion writer, poet, journalist and public affairs analyst, writes in from Federal Housing Estate, Olomore, Abeokuta, Ogun State.
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